Wireless Communications

Are natural resources a “curse” or a “blessing”? The empirical evidence suggests either outcome is possible. The paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in non-democratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies.

Natural Resources: Curse or Blessing?

Are natural resources a "curse" or a "blessing" The empirical evidence suggests that either outcome is possible. This paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization, and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in nondemocratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies.

/pdf/natural-resources-curse-or-blessing-43sxsn9q20.pdf

The article reviews the book “Information Rules: A Strategic Guide to the Network Economy,” by Carl Shapiro and Hal R. Varian.

Information Rules: A Strategic Guide to the Network Economy

One important goal of this study is to develop a methodology of inference for a widely used Cliff-Ord type spatial model containing spatial lags in the dependent variable, exogenous variables, and the disturbance terms, while allowing for unknown heteroskedasticity in the innovations. We first generalize the generalized moments (GM) estimator suggested in Kelejian and Prucha (1998,1999) for the spatial autoregressive parameter in the disturbance process. We prove the consistency of our estimator; unlike in our earlier paper we also determine its asymptotic distribution, and discuss issues of efficiency. We then define instrumental variable (IV) estimators for the regression parameters of the model and give results concerning the joint asymptotic distribution of those estimators and the GM estimator under reasonable conditions. Much of the theory is kept general to cover a wide range of settings. We note the estimation theory developed by Kelejian and Prucha (1998, 1999) for GM and IV estimators and by Lee (2004) for the quasi-maximum likelihood estimator under the assumption of homoskedastic innovations does not carry over to the case of heteroskedastic innovations. The paper also provides a critical discussion of the usual specification of the parameter space.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1296549_code459177.pdf?abstractid=1296549&mirid=3

Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances

This paper examines the use of market-share thresholds (safe harbors) in evaluating whether a given vertical practice should be challenged. Such thresholds are typically found in vertical restraints guidelines (e.g., the 2000 Guidelines for the European Commission and the 1985 Guidelines for the U.S. Department of Justice). We consider a model of resale price maintenance (RPM) in which firms employ RPM to dampen downstream price competition. In this model, we find that restrictions on the use of RPM by a dominant firm can be welfare improving, but restrictions on the extent of the market that can be covered by RPM (i.e., the pervasiveness of the practice among firms in the industry) may lead to lower welfare and higher consumer prices than under a laissez-faire policy. Our results thus call into question the indiscriminate use of market-share thresholds in vertical cases.

Resale Price Maintenance and Restrictions on Dominant Firm and Industry-Wide Adoption

The Internet can be seen as the convergence of di®erent industries, such as telecommunication, software and media, into an international oligopoly offering complementary products. In most of these industries we have dominant  ̄rms, but domestic telecommunication  ̄rms providing local access are the only ones facing a restrictive regulatory regime. The other dominant  ̄rms are typically US owned. We show that for other countries than the US the optimal regulation policy depends crucially on such factors as the degree of product di®erentiation in the end user market and the regulator's ability to credibly commit itself to a price cap. We are indebted to seminar participants at Norwegian School of Economics and Business Administration and Norwegian University of Science and Technology for helpful comments.We thank the programme SKIKT in the Research Council of Norway for  ̄nancial support through the Institute for Research in Economics and Business Administration

International complementarities in the internet : should domestic local access prices be regulated?

We consider the effects of a one-sided price regulation of one of two complementary inputs. The provider of the regulated input is a domestic firm, while the provider of the other input is a foreign firm. This describes the market structure for several digital information and communication services, where the regulated input is access while the non-regulated complementary input is content. We show that one-sided regulation may have negative welfare effects compared to a free market economy, unless the regulator has a first-mover advantage. In the latter case, regulation is welfare enhancing regardless of whether the foreign input provider uses linear or non-linear wholesale prices.

Domestic Regulation and International Trade

https://brage.bibsys.no/xmlui/bitstream/11250/166024/1/A39_00.pdf

IKT-næringen : integrasjon, konkurranse eller vennskap?

Consumers leave increasingly more digital footprints which improve rmsability to practice personalized pricing (rst-degree price discrimination). We ask whether there exist strategic e¤ects that reduce rmsincentives to do so. To answer this question, we rst note that it is optimal for a rm that price discriminates to set the purchasing price equal to marginal costs from consumers who buy from a rival. This is true independently of whether the rival has made any non-price commitments (e.g. strategic product di¤erentiation). In contrast, if a rm uses uniform pricing, the rival has incentives to make strategic commitments that soften competition. Consequently, we nd that rms might nd it optimal to commit to uniform pricing to avoid being trapped in a highly competitive equilibrium. The key insight is that a rms incentives to undertake strategic price-softening behavior depend on the rivals choice between uniform and personalized pricing, and not the rms own choice. 1We thank Arne Rogde Gramstad, Kenneth Fjell, Jarle Møen and seminar participants at Forskermøtet, FIBE and faculty seminars at NHH Norwegian School of Economics for useful discussions. Further, we thank Greg Sha¤er for very helpful comments and suggestions. SNF Working Paper No 07/18

Øystein Foros

Papers

Resale Price Maintenance and Restrictions on Dominant Firm and Industry-Wide Adoption

International complementarities in the internet : should domestic local access prices be regulated?

Domestic Regulation and International Trade

IKT-næringen : integrasjon, konkurranse eller vennskap?

Competition with personalized pricing and strategic product differentiation